Miners and fees

[Vhern]

Miners take fees as a reward, right?

What if the major miners start to make a lot of transactions with high fees? They will recover it mining and fees will increase for every user...

[DannyHamilton]

Miners take fees as a reward, right?

What if the major miners start to make a lot of transactions with high fees? They will recover it mining and fees will increase for every user...

It depends.

If a pool shares the fees it collects with the miners in the pool, then they would lose all that money that they pay in fees (since they'd have to send it to everyone that is participating in the pool.

If a pool operator gets to keep all the fees from a block, then the pool operator could create and add some high fee transactions to the block to try and trick some wallet software into suggesting higher fees for the users.  However, if the fees get too high, then people will stop using bitcoin, and the exchange rate will drop.  Then the extra bitcoins that the pool operator gets won't be worth as much, so there really isn't a good reason for them to push fee costs higher than the market will bear.

[botany]

Miners take fees as a reward, right?

What if the major miners start to make a lot of transactions with high fees? They will recover it mining and fees will increase for every user...

First - there is a probability (no matter how big the miner is) that they may not get the block reward (and the mining fees) for that particular block in which these transactions get confirmed.
Plus there is a cheaper way to do this. Miners are not obliged to accept all transactions (no matter what the fees are). A major miner could just accept bitcoin transactions with a fee greater than a threshold amount. This would have the same effect as what you mentioned.

[Vhern]

Thanks for the knowledge, I don't knew that miners can control the min fee to "mine" and others few things...

About the wallet, for example online wallets like blockchain.info, they can control the fee amount to 'help' miners?

[DannyHamilton]

First - there is a probability (no matter how big the miner is) that they may not get the block reward (and the mining fees) for that particular block in which these transactions get confirmed.

No. There isn't.

The miner would not broadcast the unconfirmed transactions to the network.  No other miners would know about the transactions.  The first time the network sees the transactions they will be already confirmed in the block.

Plus there is a cheaper way to do this. Miners are not obliged to accept all transactions (no matter what the fees are). A major miner could just accept bitcoin transactions with a fee greater than a threshold amount. This would have the same effect as what you mentioned.

That depends on if there are enough transactions with higher fees to fill the block, and how the wallets and services compute suggested fees when a block is not full.

[Juggy777]

I do not think this would happen, it's just your assumption but so far haven't heard this happen.

[~Bitcoin~]

About the wallet, for example online wallets like blockchain.info, they can control the fee amount to 'help' miners?

Actually talking about blockchain like wallets they have enabled fee recommendation system which calculate the optimum fee to get your transaction included within next block. So actually they are not helping miners, they are helping users so that transactions doesn't get stuck for several blocks. To obtain optimum fee for each byte of transaction in real time https://bitcoinfees.21.co/ provide helpful tool.

[Velkro]

Miners take fees as a reward, right?

What if the major miners start to make a lot of transactions with high fees? They will recover it mining and fees will increase for every user...

Not going to happen, there is too much miners out there.
They would need to form a coalition of minimum 80% of miners to in secret share revenue from fees while increasing them.

Very hard to do.

[rottenfruits]

Thanks for the knowledge, I don't knew that miners can control the min fee to "mine" and others few things...

About the wallet, for example online wallets like blockchain.info, they can control the fee amount to 'help' miners?

it's not a fixed or default fee, You can reduce/increase it but they recommend a certain amount to get a confirmation, I guess it's free to use any fees you want and it would depend on how busy the network is, Most miners are composed of thousands of users therefore miners would need to pay those to set a fee and even then people won't be forced to use it.

[amacar2]

it's not a fixed or default fee, You can reduce/increase it but they recommend a certain amount to get a confirmation, I guess it's free to use any fees you want and it would depend on how busy the network is, Most miners are composed of thousands of users therefore miners would need to pay those to set a fee and even then people won't be forced to use it.

Actually you are right that fee is not fixed however it is always recommended to use enough fee so that your transaction get included by miners so if you only include like 10 to 20 satoshi per byte it may take more than 24 hour to get confirmed which will make quite panic situation to one who will receive those bitcoin as they can't spend unconfirmed transaction.

I always go with recommended fee even if fee is quite high than normal.

[franky1]

Plus there is a cheaper way to do this. Miners are not obliged to accept all transactions (no matter what the fees are). A major miner could just accept bitcoin transactions with a fee greater than a threshold amount. This would have the same effect as what you mentioned.

That depends on if there are enough transactions with higher fees to fill the block, and how the wallets and services compute suggested fees when a block is not full.

doesnt matter about filling a block.
just having a block of any transactions with a $1.00 fee makes that block become $1.00 requirement. even if there are just 2 transactions per block
repeat that for 25 blocks and the average minimum that nodes 'predict' as an acceptable fee becomes $1.00, then wallets and nodes start making transactions above $1.00 to try getting into a block because they have been waiting upto 25 blocks where the pools have previously rejected their sub $1.00 fee transactions.

the even funnier part is that nodes themselves are soon going to drop a tx if it doesnt meet the minimum average (rather than the old mechanism since 0.9). thus pools wont even get to see all transactions for pools to make a choice of lowering or upping their rate.
by not even receiving cheap transactions they cannot accept cheap transactions to lower the 25 block average. thus making it alot harder to lower the price.

remember we are not in the year 2140.. so pools do not care much about fee's.. its not their main income so messing with a fee war now is easy as pie, hurting users not pools
the dilemma of pools getting paid or not is something decades away due to the reward covering their backs

so we can easily see empty blocks with only a few transactions at the minimum and then a bottleneck when everyone starts trying to outbid each other.

there are no rules to force a fee to drop but certainly many ways to push the price up. hense the term fee war. because it has no status quo mechanism to prevent abuse. or prevent the price going too high.

its already priced out atleast half a dozen third world countries from using bitcoin. ($0.06-$0.07 is an hours labour/4 loaves of bread in those countries, just for the fee!)

[raphma]

What if the major miners start to make a lot of transactions with high fees? They will recover it mining and fees will increase for every user...

technically, yes, that could happen, miners can decide the fee's they want.  but, control the whole network would be almost impossible...

Not going to happen, there is too much miners out there.
They would need to form a coalition of minimum 80% of miners to in secret share revenue from fees while increasing them.

Very hard to do.

That's why.

Right now miners dont care about the fee's.. at least not to start a fee war. @franky1 said perfectly.

[LiberOptions]

I seriously hope that they increase the Blocksize. Increasing the transaction cost is not a good solution and can stiffle the bitcoin network

[Yakamoto]

Miners take fees as a reward, right?

What if the major miners start to make a lot of transactions with high fees? They will recover it mining and fees will increase for every user...

Doesn't really make sense, since that would more than likely be a net loss for a majority of miners. The fees don't all stay at (for this example) 0.0005 BTC one someone puts that through as a fee, they would have to keep it up. If transactions start bringing down the fees, such as someone using 0.0004, and it goes through, the fees can go down.

[rapazev]

I seriously hope that they increase the Blocksize. Increasing the transaction cost is not a good solution and can stiffle the bitcoin network

increase the blocksize has some problems too... and dont see that as a good solution.

[botany]

First - there is a probability (no matter how big the miner is) that they may not get the block reward (and the mining fees) for that particular block in which these transactions get confirmed.

No. There isn't.

The miner would not broadcast the unconfirmed transactions to the network.  No other miners would know about the transactions.  The first time the network sees the transactions they will be already confirmed in the block.

Yup, I got that wrong. If the transactions are not broadcasted, then a miner would be able to make sure that he gets the block with his large-fee transactions.

Plus there is a cheaper way to do this. Miners are not obliged to accept all transactions (no matter what the fees are). A major miner could just accept bitcoin transactions with a fee greater than a threshold amount. This would have the same effect as what you mentioned.

That depends on if there are enough transactions with higher fees to fill the block, and how the wallets and services compute suggested fees when a block is not full.

If the objective is to make sure that a transaction gets confirmed quickly, users will be willing to pay higher fees. Whether the blocks are running half-full or near empty is really irrelevant to them.

[MingLee]

Miners take fees as a reward, right?

What if the major miners start to make a lot of transactions with high fees? They will recover it mining and fees will increase for every user...

They would more than likely end up losing money, and chances are very little would happen beyond what we would see today. Eventually they'd stop trying to inflate fees and the cost would naturally just go down, and so on and so forth. It would be an unsustainable system for the most part.

[franky1]

Miners take fees as a reward, right?

What if the major miners start to make a lot of transactions with high fees? They will recover it mining and fees will increase for every user...

They would more than likely end up losing money, and chances are very little would happen beyond what we would see today. Eventually they'd stop trying to inflate fees and the cost would naturally just go down, and so on and so forth. It would be an unsustainable system for the most part.

block rewards cover costs. fee's are not that important right now they are just a 'bonus'. but by messing with fee's to push the fee war eventually will earn them more of a 'bonus' later. so the losing money argument is short sighted.

also it doesnt require filling a block of ~2500tx capacity with 2500tx's to increase the fee.. a pool can have a near empty block and set the minimal acceptance to $1.00 a tx. by just putting ONE transaction of their own in with $1.00 and not add any other transactions unless they have >$1.00.

the theory of "fee sustainability" is only theory.. and not practice for atleast decade-century. so playing with a fee war can be done now. and actually is being done if you look closely

[shinratensei_]

I seriously hope that they increase the Blocksize. Increasing the transaction cost is not a good solution and can stiffle the bitcoin network

The operating of the blockchain will absolutely expensive if comparing with the traditional finance. and you can believe if the fees will be very high in my mind.

[garmerys]

Thanks for the knowledge, I don't knew that miners can control the min fee to "mine" and others few things...

About the wallet, for example online wallets like blockchain.info, they can control the fee amount to 'help' miners?

Yes, I also think so. Blockchain must be one of the major online wallet that can determine the fees becuse it is the pioneer online wallet and is used and trusted by millions of users. With the high number of users that are faithfull to them, they can easily change the fees and  people will still patronize them.